I just installed 1.4.7 on the server. Went around doing stuff, then I right clicked a jukebox with an empty hotbar slot selected. The record popped out but disappeared immediately instead of going into my hand. Opened the inventory to see if it was there, and the record was in the feet slot. I put it in a more sensible place then logged out and in, but the boots I had were apparently erased from existence.

After a few more experiments I figured out it overwrites the armour slot above the top empty one with a dropped item. I took everything out of the armour slots, tried to pick up an item on the ground, and got an instant disconnect from the server with this in the log:

java.lang.ArrayIndexOutOfBoundsException: 4
	at qx.b(SourceFile:1519)
	at md.c(SourceFile:1214)
	at qx.c(SourceFile:357)
	at md.j_(SourceFile:540)
	at qx.j_(SourceFile:200)
	at iq.g(SourceFile:175)
	at iv.a(SourceFile:199)
	at eb.a(SourceFile:136)
	at cg.b(SourceFile:349)
	at iv.d(SourceFile:57)
	at iw.b(SourceFile:39)
	at ht.b(SourceFile:30)
	at net.minecraft.server.MinecraftServer.r(SourceFile:762)
	at ho.r(SourceFile:248)
	at net.minecraft.server.MinecraftServer.q(SourceFile:679)
	at net.minecraft.server.MinecraftServer.run(SourceFile:613)
	at fy.run(SourceFile:849)